El Salvador closer to issuing bitcoin bonds, proposes digital securities bill 

El Salvador’s national assembly is reviewing the draft of a bill proposing to regulate digital securities, as the country inches closer to launching its bitcoin bonds. 

The bill was presented to the Legislative Assembly of El Salvador by the country’s Minister of Economy, Maria Luisa Hayem Breve. The legislation seeks to establish a National Digital Assets Commission to regulate digital asset issuers, service providers, and other participants, CoinDesk reported. 

If passed into law, a Bitcoin Fund Management Agency would be created to safeguard and invest "funds from public offerings of digital assets carried out by the State of El Salvador and its autonomous institutions."

El Salvador was the first country in the world to make bitcoin legal tender in September 2021. The move has drawn criticism from international credit rating agencies, as it has lost over $60 million on its bitcoin experiment. 

However, the Central American country's president Nayib Bukele is pushing to raise $1 billion via bitcoin-backed bonds. The bonds, commonly known as “volcano bonds” were originally planned to be released in March. However, El Salvador’s Finance Minister Alejandro Zelaya said the government was delaying the issuance of the bonds due to the war between Russia and Ukraine. 

The bonds offer a 6.5% yield that matures in 2032. Individuals will be able to buy the bonds with a minimum of $100 without a stockbroker. Additionally, El Salvador plans to offer citizenship to foreigners who buy the bonds. 

In order to launch the bonds, El Salvador’s Congress must pass the bill. However, President Bukele’s party holds a majority in the legislature.